3 trillion is also supposed to be a reserve like a pension fund or 4o1k to pay future benefits. Its not just for those on the system today, but not only pay what they get today, but make sure the reserves are there when revenues start to come in less and as our baby boomer generation retires, so those are supposed to be reserves like Pension Funds and 4o1 kays and the like. So, in terms of Social Security, the key thing is we do have enough wealth in the economy to pay for the current promise benefits for those on the system and those who will go on a system for the next 10 or 15 or 20 years. The problem comes with younger people, people in their teens, 20s, 30s. Their system will not be there for them because its payasyougo. There are no real reserves there, so thats why i think for younger people, they should put in a system where part of their payroll tax goes to their own personal accounts with plenty of rules and regulations about diversity, diversifying and cant spend it. But, is there property. Right now those benefits you pay it each year you get a notice from Social Security sane what you will get under certain assumptions and you think this is money that they are, it is that. The courts have ruled that you dont own that money at all even though you contributed it. They make is how might seward yours. So, i won a system especially for younger people where they actually own that money, own those assets and politicians cannot play games with it like they do now where they say there is a two and a half or 3 trilliondollar surplus and it does not exist. We should not do that to future generations, but in terms of the system today we get normal growth rates in this country, normal productivity, the system for us and for the next coming generation is there to pay the promised benefits. If we continue to make idiotic mistakes which we have been in recent years been there will be nothing there for anyone, so thats why i think we need to get these reforms in so we have that resources there to meet the promises to our generation and the next generation, but also bring in a new system where again like healthcare, liability into an asset because when kids get their first parttime job and keenly this money, that money is invested. When you deposit with the bank or index fund or whatever you do with it it gets invested and macros the economy. Host emailed to you, mr. Forbes flat tax is meant to make the rich get richer, just like when reagan reduced the top rate from 72 by 40 . A gift to the millionaires of a 300,000 reduction on tax on each successive 1 million in income. You are looking at things through the eyes of the wealthy. Guest im looking through someone like most americans who want to see this economy grow again, so people who start with the least have a chance to get more as lincoln put it improve their lot in life. Right now you have a stagnant economy. Who gets hurt the most cracks incomes are not rising for low income people. They are not rising for middle income earners and we dont have the upward mobility have had in the past, which is why we have political frustration today. So, a flat tax and thats why its worked around the world it enables an economy to focus our resources and our brainpower on productive things instead of idiotic tax code. So, in terms of growing incomes by the way, john kennedy, we host talk about ronald reagan, john kennedy reduced income tax rates across the board about 23, 25 including the top and so you could accuse him of favoring the rich, but what kennedy tax cuts when they were finally enacted with johnson led to the booming 1960s. Reagins led to the booming 1980s. We created millions and millions of new jobs including a more and more high paid jobs instead of these parttime jobs. You are counted as employed, but you are not getting nearly what you think youre worth, so we went to get the dynamism of a growing economy and the flax flat tax is one great way to do and as for tax lawyers and irs agents, even though im a conservative i would support job retraining or perhaps urge them to work for uber, do something useful. [laughter] host becky kurtz, a tweet from becky who is the smartest person you know in and in or out of governments and whats the best run us city and state in your view . Guest the best run city and state. In terms of smart people, one of the things is there is a lot of smart people and the key is its not enough to have the smarts. You also have judgment and a willingness to learn. And a lot of people who have iqs that could boil water, but who cannot seem to translate it into doing something that. So, yes, and a lot of brain power, but they come to some conclusions that i just disagree with, so thats the nature of life. Its not enough brainpower. You have to have a lot of other characteristics and by the way, people can also focus on a particular area and do very well even if someone would say, well, they are not boiling water with their iq. Thats not the key thing. In the early days and i think google is getting back to it, in terms of computer programming, that takes brainpower, but they dont care if you know how if you are really good at it. If you are a kid and you get into this they dont care if you finish high school or college, if you can do the job they want you. Some of these jobs do, 10000 month, 10000 month. 100,000 signing bonus. 100,000 stock options, so its not the degree, its how you apply what you have that i think we will see more and more of in this economy. In terms of the dynamism of the economy, thats how we get a head. Again, you get entrepreneur and people doing things they comes from the most unlikely areas where its middle aged milkshake machine salesman who invented modern restaurant injures three or henry ford who ran a Grocery Store and helped create one of the biggest enterprises in the world. Its Amazing Stories that can unfold. Host to take beckys city state question, do you have anything that comes to mind . Guest well, i mention he was former governor of indiana, mixed daniels who demonstrated indiana over relentless work, not just one day, but relentless day to day work. You can do what government should do, do it more efficiently, reduce taxes and turn a state that should have been a basket case into one of the best Credit Ratings in the country. On the opposite side, you take the word grease and translate it into english and you get illinois. One of the worst rated credit stay in the country. Chicago is about to go broke. The stay, they have a great governor, but the Legislature Just is in lala land we dont have to worry about revenues, so its a disaster and so i think Mitch Daniels is an example of what can be done with good leadership in illinois. What happens with over time in a series of bad decisions made. By golly they come to bite and i will give a good word to even though people dont seem to like him anymore, scott walker in wisconsin. Those reforms are starting to kick in. He took a lot of grief for it. I dont know why that campaign was so disastrously wrong, but in illinois i mean, wisconsin he did real things. Wisconsin has always been a laboratory. Progressive era, whether it was welfare reform or Tommy Thompson in the 80s became the basis for clintons welfare reform in the mid 90s and what walker has done, so thats what federalism is supposed to be about. See what works and then maybe do it nationally. Host just a few minutes left. Bobby, tanto, south carolina. Caller firsttime caller, so im kind of nervous. Im 50. When i was 45, my family has a history of Heart Disease and i played golf the week before, through batting practice to 16, nine, 10 years old, that friday had a heart attack when as 45. Host i apologize, body, but we are running out of time. If you could get to your question for mr. Forbes. Caller i will write him. Host thank you for calling in. Ron in new hampshire. Caller thank you for taking my call. Steve, want to ask you about the tax implemented with value 19 amendment. Its a flat tax, but has no exemptions or deductions, so a revenue neutral flat tax with those conditions is about a half a percent in the tax is everything and the advantages are it gets rid of the distortions of our Current System that under taxes the intermediate sales and it would have side effects like discouraging highfrequency stock trading and making longterm investments more tax efficient and the poor would only pay half a percent on their income, so i was wondering what you thought about that tax. Guest anything that is low is music to my ears, so if you want to send me more details on that and we do have to get rid of the 16th amendment of the constitution or do something where the tendency is when you bring in a new tax it stays on the other taxes stay and very very hard to get them down once they are implanted. So, yeah, lets me know what the ideas when you say tax everything, that encompasses a lot of things that i want to be sure i know what exactly we are getting into. Thank you. Host nebo, cleveland, ohio. Hello. Caller i would like to ask whether you have any opinion about philanthropy, Warren Buffett and bill gates say a lot and i have been listening so far and i have not heard mr. Forbes say anything about this. Does he have on opinion about the way wealthy people distribute or pass on their funds to other people or other groups, other nations . Host what do you think, neville . What do you think that views should be . Caller my opinion is that Warren Buffett and bill gates are setting a fine example. Host thank you, sir. Guest one of the Amazing Things about the United States is that we are the most philanthropic nation in the world. Over 300 billion a year given that does not count the hundreds of millions of hours people contribute in terms of volunteer time and that has been true almost from our very existence and we are also the most commercial nation ever invented and people think they are opposite poles of air not. Commerce is about meeting the needs and wants of other people, and there are many examples and you mentioned gates and buffett of people who have done very well in the private sector are also very effective in philanthropy. What gates is doing in terms of fighting malaria and other diseases, berry berry acai or a. What hes tried to do an education and i think Warren Buffett made a very good point. We do a conference each year and one of the points that buffett likes to make is in terms if you are an entrepreneur and went involved in florida to be, dont go for the things that have already been done, what he calls the routes of the easy things could go for something of a high risk of failure. Go out onto the front here and try to make things happen. You may not work for a while, but just like a new business, most dont 16 succeed, but go on the frontier and go out of your comfort zone to make things happen that others have not done yet. So, in terms of the reforms, one of the things we point out in the book on the tax side is that when the American People have more they get more. They dont need to be bribed by the tax code even before we had an income tax, we were very philosophic nation and in the 1980s, just one story, 1980s a lot of philanthropy stop when reagan cut the top rate from 70 and an excellent anti 20 that it would hurt tradable giving because uncle sam in effect would not subsidize 70 of the dollar given, but only 20 cents of each dollar given. What happened was the opposite. People not only gave more, but the rates of growth went up as well, so when people have more they give more and this Country Research shows that roughly the American People in cash gifts give about 2 equivalent of 2 gpa year, so thats roughly 350 billion. In good times it may go up a little bit to 2. 2 and in rough times and make a database, 1. 8, but its fairly fairly constant, so the bigger the economy the more people give. The more people have the more they get. Host Steve A Forbes we try to do this program back in april. Whats happened . Guest we had a train accident. I was coming down on the amtrak outside of philadelphia and suddenly the train came to on a abrupt halts, not the kind of thing normally slowing down around a curve or anything. Fortunately, we were in the last car, back of the train and so we were jolted and our coffee flew and things flew, but thankfully we did not. In the front of the train there were real injuries and sally to workers, how it came you have people working on a truck with a train coming on in this day and age especially, those two workers were killed. So, we were in the back of car. We stopped. Nothing was said. I wish they would have an intercom system for emergencies where they could say, stay calm. We did not go out of the train because there was a truck on one side and a track on the other side and we were not going to risk back, so about a halfhour later there were rumors with people coming back and forth and before the First Responders came and said there was an accident, dont move. Will take you into good off and in about 15 or 20 minutes later we went off and walked carefully down the steps, went across the tracks, went across the field and thankfully there was a church that had an adjacent gymnasium and we could go in there and waited to see what was going to happen and the Amtrak Police have the manifest so they knew who was on and i checked it to make sure no one was missing and you just dont know in these situations, so we waited and buses came. Arranged kindly for a car for me to get me back home since i was not going to get back here on time, but they still have not come up with a definitive report on what happened on that, but thankfully i was not in the front cars because the injuries would have been very serious instead of just losing your coffee and getting a jolt. Host uk down on the train today . Guest train today, uneventful. Host uneventful. Good. Steve forbes, most recent book is reviving america. This has been built tv on cspan2 indepth